Why is it when I enter my stimulus payment amounts into TurboTax that the amount I owe via Oregon state increases?

[Asin1]

I am a single filer, recieved both stimulus payments, and when I enter the amounts into the system... For some reason the amount I OWE for state increases. I thought that the stimulus payments were not considered taxable income. Is there something I am missing here?

[HelenC12]

The stimulus payments are not taxable. The stimulus payments are not income so you won't owe taxes on them. Go through your entries to make sure you entered your other information correctly. Do a line by line review comparing your 2019 state income tax return versus your 2020 income tax return to find why your amount due increases.

[triciaroche6]

The same is happening to me, but with Federal taxes due.  When I remove the stimulus amounts from the questions that specifically asks for the information, I am receiving a refund. When I enter the stimulus amounts I am due to pay almost the same amount as my stimulus checks.  

[CatinaT1]

If you remove your stimulus amounts, you are reporting that you did not receive any stimulus payments and so the stimulus payments are being shown as part of your return.

If you did receive your stimulus payments and the correct amount, it will have zero effect on your return.  

I am assuming from what you are saying, you have a balance due.  When you remove your stimulus amounts, TurboTax is including what you should have received as stimulus amounts and that is being used to offset your balance due and the putting you in refunds status.

Be sure to accurately report the amounts of stimulus money you received.

[DaveO51]

Oregon does indeed (potentially) tax the stimulus payment and Turbotax knows about it. The relevant form on the Oregon tax side is a worksheet titled "Fed Tax Liab Wk", line 8: "Tax Rebate plus Recovery Rebate Credit" which Turbotax populates from IRS 1040, line 30: "Recovery rebate credit".

[Buckerou]

I am also in this category. I got so far along in the TT program and it said I owe $1,800. Then it wanted me to fill out a Est. Tax Penalty form 2210. Then it asked me about the stimulus checks and the amount I owe jumps to $3,100 +/- ? I thought I read where these stimulus checks do not affect one's taxes? Then why did it jump up?

[CatinaT1]

Before you enter the amount of the stimulus payments at the screen Did you get a stimulus payment?, you have been given the full Rebate Recovery Credit (the equivalent of the two stimulus payments).   This can be found on line 30 of the 2020 Federal tax return.  At this point, this is an 'incomplete' Rebate Recovery Credit.

The refund monitor on your screen displays a refund amount that includes the stimulus money as part of your 2020 refund.   When you enter the amount of stimulus you received, the refund monitor adjusts to account for this.

See this TurboTax Help.

This TurboTax Help states that the Economic Impact Payments (both the first and second) are not considered income, and therefore are not taxable.

[Buckerou]

I found this answer but I am still inclined to say Turbo Tax should have done it the other way. It should have shown the full tax amount owed then asked if you received both stimulus payment. If the tax payer then (and only then) did not receive the payment(s) they should have been directed to fill out for the Rebate Recovery Credit. This would not have shocked thousands of tax payers. It must not only be me, because it was actually brought up on the news this evening. They explained it on the news to anyone watching. I would tend to think the majority received both stimulus payments.

[Buckerou]

When I did my taxes in Turbo Tax the other day, it told me I owed one amount. It said I was not able to e-file because a form was not the final version. It did however show me the figures that I owed for the Federal and PA state. Today when I go back to finalize it, is when it asked about the stimulus checks and then added another $1200 to the bill. So when you have in your mind one figure (sticker shock) only to have it increase by another $1200 approximately one week later. I am sure I am not the only one this has happened to or it would not have earned mention on the 5 o'clock news.

[DaveO51]

Unfortunately the TurboTax Help is only partially correct: It is certainly true that the Federal government is not taxing these payments but at least Oregon and maybe other states definitely have chosen to tax those payments.